Section 187c

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 August 2013 Dear all,

Mr. A is the nominee shareholder in a public Ltd. Co. Now Mr. A is no more in employment with the Company therefore he is transferring his 1 share to another employee who will become the nominee shareholder of the Company.
Whether a declaration u/s 187C needs to given and Form 22B required to be filed with ROC?
If yes, who will give declaration about the same?
In my opinion the new nominee shareholder will give declaration to the Company.

Experts view solicited.

Thanks in anticipation.

Ajay Mishra

Ajay Mishra (Expert)
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29 August 2013 Hi

The co, who originally have owner of shares can change the nominee.

For more, go to the following link:

http://www.advocatekhoj.com/library/rules/companiesdeclaration/index.php?Title=Companies%20%20%20(Declaration%20of%20Beneficial%20Interest%20in%20Shares)%20Rules,%201975

Querist : Anonymous

Querist : Anonymous (Querist)

29 August 2013 Thanks Sir

Ajay Mishra

Ajay Mishra (Expert)
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29 August 2013 My Pleasure......

Querist : Anonymous

Querist : Anonymous (Querist)

29 August 2013 Dear All,

Whether, benificial owner is required to give declaration in Form II though shares are transfered from one existing nominee shareholder to other nominee shareholder and interest of beneficial owner is not affected. New Nominee shareholder will give his declaration in Form I? Kindly clarify.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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23 July 2025 Yes, the beneficial owner is required to give a declaration in Form II in the scenario you described, even though the shares are transferred from one existing nominee shareholder to another nominee shareholder.

Let’s clarify this with the key points:

Understanding the Context:
Nominee Shareholders: In many cases, shares in a company are held by nominee shareholders on behalf of the beneficial owner. The nominee shareholder holds the shares legally, but the beneficial owner is the person who enjoys the benefits (dividends, voting rights, etc.).

Transfer of Shares Among Nominees: If shares are transferred from one nominee shareholder to another, and the beneficial ownership remains unchanged, the beneficial ownership interest is not affected.

Forms I and II:

Form I: This form is typically used by the nominee shareholder to declare their status as a nominee (holding shares on behalf of the beneficial owner).

Form II: This form is used by the beneficial owner of the shares to declare their ownership interest, regardless of whether the shares are held by a nominee or directly by the beneficial owner.

Clarification Regarding the Transfer Between Nominee Shareholders:
Form II (Beneficial Owner's Declaration):
When shares are transferred from one nominee to another, Form II must still be filed by the beneficial owner, as the form serves to declare the identity of the beneficial owner, regardless of which nominee holds the shares. This ensures transparency and complies with Section 89 of the Companies Act, 2013, which requires disclosure of beneficial ownership.

Form I (Nominee Shareholder’s Declaration):
The new nominee shareholder will be required to file Form I to declare that they are holding shares on behalf of the beneficial owner, as they now legally hold the shares.

Why Form II is Required for Beneficial Owner:
Even though there’s no change in the beneficial ownership, the company must maintain an updated record of who the actual beneficial owners are, and the transfer of shares between nominees necessitates that the beneficial owner makes a declaration in Form II to keep the records up-to-date.

This is part of ensuring that the company is compliant with regulations related to beneficial ownership and shareholding disclosures.

Summary:
Yes, the beneficial owner is required to give a declaration in Form II even though the shares are transferred from one nominee shareholder to another, provided that the beneficial ownership remains unchanged.

The new nominee shareholder will give their declaration in Form I as they now hold the shares on behalf of the beneficial owner.

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